Mercedes-Benz has announced that it will take over American Smart distribution from Penske Automotive Group; Penske has served as the sole importer and manager of the brand in the U.S. since its 2008 launch. This was a unique arrangement, since in every other country where Smart cars are available they are imported and sold through the company's corporate parent, Daimler. That arrangement will finally extend to the U.S.when the transition is complete, which should happen by the end of the second quarter of this year.
At present, Penske Automotive Group not only imports, distributes, and markets Smart cars in the U.S., but it also owns 10 of the 75 dealers that sell the cars. Many of the current Smart stores are aligned with Mercedes-Benz dealerships, including six of Penske's shops, while there are 17 Smart dealerships that aren't owned by Penske or paired with Mercedes-Benz showrooms; those operations will be getting pink slips and, per the dealer agreement, will see Penske buy back things like inventory, parts, and signage. But most important, despite all this wrangling, Smart owners will still be able to get service and parts—under warranty or otherwise—from current dealers until the transition is complete, and many of the dealers will continue to operate after Mercedes is in charge.
The big question mark for Smart moving ahead in the U.S. is product. The company's only current offering, the Fortwo, comes in hardtop and convertible variants, either with a gas engine or as an EV. Its sales are lousy—just 5927 cars in 2010—and since it's designed for city motoring first, and everything else second, the Fortwo doesn't have a whole lot to offer suburban America. Even its mileage, at 33 mpg city/41 highway, is hardly compelling when buyers can get comparable fuel economy from bigger, more powerful, and more comfortable vehicles like the new Hyundai Elantra (EPA rated at 29/40). Penske had been planning to sell a Nissan-based B-segment Smart hatchback in the States—we still insist it was to be a Micra with a Smart snout—but that's been axed, effective immediately and contrary to a statement from a Smart PR representative just a week ago. Mercedes previously announced long-term plans to collaborate with Renault-Nissan on a new small-car platform, but it will still be years before that tree bears any fruit. The bottom line: Smart needs a U.S.-appropriate product now.
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